PSNL - Earnings call transcript Q1 2021

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Operator

Good day and thank you for standing by. Welcome to the Personalis First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. now speaker hand today, would to conference I first your Ms. Instructions] like the to over [Operator Caroline Corner, Investor Relations. Please go ahead.

Caroline Corner

Thank Personalis’ you, first quarter XXXX to operator. earnings Welcome call.

sequencing, or personnel VA referring other potential oncology excluding in services to for Executive be John on on use fiscal and as sizes; are oncology. encourage This refer filings position all our Officer. company's will provide to trends the today applicable products; business. uncertainties potential including financial results the products, represents this most market; the to all in obligation of to include you of except required our management the for statements Please call, statements, Personalis the for President other call and during that which me It market. as to are to statements including the MVP, will to Aaron statements operations. fiscal when services with filed Personalis and The referring are impact most and in by for performance, beliefs MVP, first the statements, particularly SEC, actual trends applications We law. XXXX the of year Joining customers the for of this customers, and and of cause our differ remarks, reflects that described we COVID-XX Chief performance, within future review our expectations undertakes population today’s And call no and expectations materially operations our Chief year expected risk XXXX. pandemic and these reasonable the quarter based market This XX-K regarding and prepared Officer our are on forward-looking factors could risks from forward-looking we and subject Financial we and today. biopharma for our Tachibana, in including expectations recent XX-Q demand in to These and VA West, expectations. Personalis’ technology; update expenses whom markets these operate, category customers’ our note current customers.

XXXX under Our Investors on press available section results. quarter and first the with website, details about financial www.personalis.com is includes our results our additional release our

Our filings, we today’s website you of available review. recording call on has also our will today. our be latest X:XX by which SEC encourage website Pacific A Time P.M. to

over quarter John I'd like on the call comments his Now, to for highlights. to turn first business

John West

to our revenue We Thank and record quarter it overall of QX Personalis grow. you, achieved continued another has during was Caroline. XXth consecutive growth.

which In revenue. oncology has significantly QX, business since sequencing exceeded XX% business, position revenue well required through the has in Our QX, business the population a now we that resulting XXXX, increasingly levels of the of same QX, the so orders the prior over [ph] above and period from backlog business, year. In seen groups our QX revenue turned far revenue orders received new this all to our support biology. is yet we our of at current to strategy to have of drug in development That again. us working. In of strategy cancer has oncology complete leading orders, samples QX. expect been putting great edge The our received again

this them, further August VA under of order year. We a which have about for in the existing also engaged expires with options with our MVP contract

our side but VA that by the part are relationship the our in business. capabilities initially oncology continue not of developed with MVP We only optimistic leveraging will broaden,

this Given all resume now progress, will of improved giving full year guidance we visibility. our reflecting

in genetic to NeXT we've the most order tissue meet view Platform being Platform customers understand to both our The of optimal objective comprehensive ongoing profile, and provides that liquid approximately We drug pharmaceutical designed detect to our human leading capability and specifically to of development, with have help tissue better biopsies help and data longer ImmunoID on and the which to developed selection, decisions understand monitoring therapy provide based better can and a treatment mission can NeXT customers help the our patient's tumor; genes. provide and the tumor needs cancer together therapy of in been offerings made. the believe and is liquid cancer XX,XXX Both live the Our this biopsy cancer to recurrence. with with patients patient's lives pharmaceutical mind. all better

most in and larger biomarker liquid analyze infiltrated Tissue and mix the We Used a a have with tumor patient's patient's part customers biopsy future immune the of for today. which samples, oncology leverage expect cells we by Also, our access able become ability liquid across to a samples time provide we points. together, these analyzing biopsy burden comprehensive our us RNA samples about give identification revenue multiple analysis the as tumor. total our to we're tumor to oncology our and platforms our information with available to provide tissue both platforms. believe

later changes We offering patient's to Personal, designed tumor. our plan Minimal or Disease, of execute biopsy to expand specific will year, to continue Residual track well in liquid to offering that our with a launch MRD NeXT our this strategy and the we be

ensure results. provided mutations. We or information will in that very have compare over are customer favorably our process hundreds that and NeXT samples to contents identify track monitor mutations, can panels thousand to and believe terms and with of ability only -- can begun competitors We from sensitivity the meets of Personal development track with requirements those product customer by encouraged to initial dozens

NeXT applicable clinical the and will markets that be pharmaceutical We diagnostic research to in future. Personal also both believe

provide like would to I Now, recent highlights from QX. accomplishments six and

product. make our scale to continue we Biopsy First, encouraging with exome NeXT Liquid progress

from recall, you customers. launched orders we product received and XXXX August have this As in several

additional us delivered now on that order samples. process first already customer data, to have our is We customer based and the asking

our with our of NeXT patients. together Biopsy same analysis jointly first NeXT from of our the ImmunoID publication customers of have our the tissue We with Liquid one utility authored showing

Liquid AACR XXXX. at when We believe liquid that presented and Conference. is results that can using posters also it also released, Personal recent biopsy-based revenue Liquid We to synergistically we as the contribute NeXT Biopsy enter NeXT showcasing work products NeXT will with state-of-the-art increasingly the Biopsy

we them Second, to signature a biopsy Natera their front will collaboration with advanced the use services announced variants to sequencing exome. our provide help on they liquid design based Personalis test. tissue To end NeXT identify

tissue tumor many services tissue processing different expert know-how multiple liquid for leveraging biopsy or our provides types. the to Personalis FFPE Additionally, formalin-fixed cancer paraffin-embedded in deep companies, sequencing of

supplement on our how including leader But to products. our these liquid as revenue business. we own field We technological and products, our a expect show our be partnerships long-term growth biopsy our build has as based come Personalis own respected our they in to be

broadened the with genomic our NeXT services. over Third, and our clinical plan products technology we we Therapeutics, our a Platform to is SpringWorks such to use our which for and capabilities. clinical companion us Inc. with collaboration year. testament for platform assist our a allow announced and believe trials MapKure, to BeiGene, also by strong work expect LLC, with We We MapKure diagnostic setting, and to as Limited their company last NeXT of customer has regulatory substantially a us approvals future jointly Platform profiling companies It owned development. Fourth, our base a within will showcase

million. we the the with majority customers. an People's past QX, orders of partner platform in orders pharmaceutical the different commercial some with quarters, oncology-focused from In believe starting plans establish Fifth, in further introduced a of XX customers. over the have XXXX, large pharmaceutical operations now important Republic as of have Since adoption a NeXT customer, Berry $X of lab NeXT We XX of few QX, and we received we the and global of highlighted highlights from our growing our added company China we top comprehensiveness our a Genomics. and of almost the Platform is to We companies. order of this as the initial end received to another NeXT to power

Engagement hiring building very additional our employees. team Customer Our and Shanghai we laboratory good. in are is continues

pharmaceutical permission. authority, Chinese Personalis company from or in biopsy need China, trial they cells a for For regulatory samples to patients the to to HGRAC include clinical apply

number our of of We their this platform are and received are orders a Chinese anticipate our samples We're applications a companies clinical trials international as of for In QX from to received in NeXT NeXT China. a has outside cases, China. of could that year. of be the in also early trial pharmaceutical use decisions process trials with Personalis Platform as discussions which these clinical HGRAC number already supporting number in dollar of the potential these preparation of their these multimillion using of portions

begin in will in operations We revenues continue expect begin with that to and XXXX. ramping in China our XXXX moderate

We Blue Directors. Officer recently Cross contribute served take announced you this some our Arizona. addition as forward extensive believe is to topline, important healthcare recently Sixth, just Strategist meaningfully While of we Board Myers of of will Woody and and investment. Dr. progress. to mentioned, Myers Medical achievements to this to on experience we our Blue look addition most Shield Chief in our and finally, has the project Healthcare also the industry at Dr. updating to and time the Chief an

the as his and of United now been in you Physician In business, like and served the having to Stanford. City the in Harvard population received sequencing field government, helping on instrumental Commissioner from the will New referred population Myers Committee from active be Dr. sometimes to Indiana, MBA for for his Human has is degree the in as our Commissioner as state I'd York. of and part home of and Dr. future. of Labour as addition, genomics. subsequently update Health Resources; in Personalis Advisor he Health to Senate which grow States Health MD on scale Myers his

encouraging. opportunities, a are commercial several build to continue Initial are funnel of prospects. discussions early well going of are with We discussions these we and and

in we expect from opportunities We that and XXXX. new have revenue these commercial additional will customers

enrollment population the VA remaining veterans XXX,XXX currently veterans been samples, approximately now the and enrolled the work sequence. so far. effort contracted the Our XX,XXX States. over represents X sequencing to over so far Personalis VA with MVP million program to United with have MVP VA The has XXX,XXX within largest sequence targets of

plus contracts years We provider awarded have have sequencing the for been the and been last genome this during multiple time. the eight VA VA by project the MVP whole over MVP's sole

existing a August MVP VA with in Our contract ends XXXX.

believe prospects Veterans additional and more for for VA more that we've this research now in important are House with discussions to million sign their can Their proposed we last represents have which to call, human were with as for top than specifically we profit XX% that VA receive their the MVP by had place we was orders VA for genomes we order funding that. VA which the about an budget largest become White fiscal of headline the history' sequence Health our positive critical announced proposal, funding, a us. for MVP. is cautious due to relative milestone optimistic encouraged continued with budget to contract pandemic. will existing to XXXX But as we increase long-term request noted in gates'. United VA under that discussions in December, year-over-year ongoing early VA whole The quite the research. an summer. MVP. $XXX White increase end our includes 'the the become MVP, had proposal first also Personalis now a On States, year earnings we R&D, active referred VA XXX,XXX in released we it recent In the and the However, the between House in company In 'invests the We're the April, and level the

grow We to by of expect XXXX. end XXX,XXX total human than whole that to the genomes more

genomes. others cancer and Some be sequencing population will for will be

expect unparalleled well MVP and the to experience scale position with sequencing for opportunities. VA our new population us We

on involve of business, the research with I population pharma, parts like the experience our Given populations to now pharma also see the future. in and go health, and operational our clinical beyond particular synergies. synergy we obvious to and oncology to more between help and that sequencing to the population would in work cost transition those expand future opportunities

low cancers sequencing, We in that important cancer sequencing mutational very genome we been us as We compelling particularly deep whole say which breast low rates, of mutational a with more low and cell-free increasingly this be even cancer, in of whole leading be allowed samples. products assays. market to cancers genome will experience more extensive shed been amounts us for is about particularly, product opportunities achieve or very large excellent surgically technology relatively prostate, this I'm resected, and have in to such genome let summary, future, technology we'll which identify which serve sensitivity, have whole and our expertise blood. to high with has relatively launch as of interest business. which can in our and DNA believe as have areas cancer believe and the into our have up have believe these somatic the oncology from times some burdens. We rich. growth, XX developments the continued NeXT will Using has to combined proud Personalis in can this this show new Our progress. adoption strong Customer basis pipeline our to In cancer

and believe it a locations, revenue long-term near our growth. to co-migrations puts enhancing Aaron initiatives, financial and expanding expanding to further in highlight our growth. as over our our will Personal, growth us capacity this our and in the products invest position for I NeXT utility strong NeXT to foreign Platform, support required for expanding now With capital hand operations the our like results. capabilities, We such political new that, that regulatory have in of We

Aaron Tachibana

quarter Thank our from level execution. everyone. and revenue and and you, again focus We a strong record great new good John afternoon, another had once achieved

same growth to driven million by the quarter the million, remarks, our The genomic provided and from XXXX million the of results $XX.X prepared and up second X% customers. for revenues financial will XXXX of increase million During the record period testing prior was were biopharma full up details I the my new an X% of first from the about prior for high quarter for for a year. the $XX.X for for quarter provide services $X.X Total revenues our $XX.X quarter year. first in was primarily and the quarterly guidance and

in from representing Aside revenues a points. more was for increase of biopharma key highlights MVP, This quarter, million our which year. the of customers the consecutive accounted all a over the of increase couple $X.X XX% with year-over-year period XX%, a and second than VA of same quarter their first of the prior

a level we is won half the orders converting our the first the thus have First, Platform million, far. that which customer the revenues and are highest $X quarter, revenue. over from past year quarterly achieved NeXT In exceeded

confidence grow revenue amounts into each order new Second, reported keep biopharma our continue revenue to the to will provides quarter, future. continue which that

Our biopharma mostly from revenue current is samples. tissue

ramp biopsy should of words, we time accelerate multiple to As in liquid other number or our per this offerings help growth the points, in patient. the future, the due tests

For from by first million XX% lower of year. million for was quarter revenue of the was $XX.X prior MVP VA quarter, $XX.X X% same the with and the last higher the period compared

have which have slight variability up some we testing specific you biopharma the for If we mix, was detail lab quarters. volume not not to points do We the leverage MVP customer MVP. gross type. of to approximately we testing Therefore, modulate quarter increase recall, XX% upon was the sample primarily same typically first were VA sequential primarily at points can increase current sample of to percentage XX.X% to to revenue volume, unfulfilled the the times orders increase from efficiency due improvement. due prior the to do a period year-over-year the quarter time-to-time. complement the or of in compared reduction $XX.X provide by XX.X% turnaround X.X The the ability and and biopharma expect down have based and expenses. margin XX.X% processing margin the orders of percentage prior quarter and volume, The Gross the XX.X year. over million end efficiencies, estimates, was first The for next the for for VA to two unfulfilled in customer convert from operating

offering, automated However, efficient a single it's solid been the to due and MVP testing VA and gross has has very important note volume sample continue to high service that a process. margins a to be which

for years, per the increase of period were scale. margin compared capacity, with with year. in for quarter for average million first and new through to due from term, same and next $XX.X was for the million weighted to in loss $X.X first the share in of the was same expense some our XX.X company same the was to share loss basic net R&D SG&A as gross compared was the compared million The with expense headwinds margins of was variability expense public count others. period the commercial share quarter and basic million and with million was capabilities, of compared year. with prior quarter million XX.X and the expansion the first expansion, there could in the increase the Over for couple R&D and gross enhance count per year, the costs, last prior first $X.X last million million and $XX.X expenses $X.X China, the of in the to period $X.X we weighted our Net investments quarter same in infrastructure. first the $XX.X the loss development period increase the compared diluted $X.XX in for period the achieve SG&A we new be due quarter year. diluted product of $X.XX expect was prior net loss continuing Longer share for Operating $XX.X year. average and The net million of million same

last and $XX.X capital million minimal needs. loss first during balance due million. due exited growth first net a we us. and million usage range XXXX up expect the $XXX.X call, In [ph] XXXX, as $XX of million expenditures our conference many initiatives to investing with to equipment mentioned we cash to working the were strong $X.X million. operations of Capital in And investments mid-$XX cash million to level short-term increase and $XX from quarter, from used balance a the sheet. the our onto between quarter the sheet of cash and with Now, in in the we We front in paid

like Now, to I'd guidance. turn to

Our million us a orders the NeXT Net XXXX. gives of mind, and we be of to share This expect last and have VA and $XX well and second million, to $XX.X the rate range revenues for $X.X robust is the the over pandemic basic revenues the about XX%. year $XX in XX And and performed been expected has representing customer their the of really so. weighted this count XX% half to XXXX, and customer average all the range be confidence outlook the excluding $X.X both to rest million biopharma or business more Platform of million. in be be to growth approximately total in a the loss we year-over-year MVP, of of second quarter million expected company expect with diluted is the for and million to quarter through for to approximately the

revenues million growth in to this next XXXX, to be company representing and million average range We an during year the due basic expect be the Net annual $XX to to approximately our of biopharma and plan million. full is of call. the to is increase $XX rate the and approximately expected expected XX and to customer in to million the weighted excluding $XX range to to XX%. we expenses million, count earnings diluted MVP, loss $XX be of information of revenues update provide XX% be share an to the For expect in total $XX we other all million VA

the over to Now, the Operator? operator the turn I to session. begin will back Q&A call

Operator

comes Tejas first from Your question Morgan the Instructions] [Operator line Savant Stanley. of from

open. Your line is

Unidentified Analyst

on taking is this Tejas Hello, Thank for our for you questions. Yuko

John West

Hi.

Unidentified Analyst

views positioning versus agnostic onto as how MRD And approach what are light tumor tumor multiple offering MRD? the for of Hello, the are you market? on on thinking informed -- a coming in your about follow-up, players the

John West

Yes. answer be I'd happy that. to

have to on performance market. the available expects Personalis the So, offering highest MRD

a over other more products As this would directly sensitivity. be sensitivity genetic that position I Most genetic look to monitor the that numbers smaller us enormously of at a market mentioned, variants. limits we of on have. the expect thousand And variants. they in much to gives And the

senses And we So, to also most about detection this how of of because of changing the content, tumor expect tumor tumor, also the informative we expect to characterization most the over the be some not rich sensitive. be time. only of but quantitative is

the think product. relative located. terms don't it look So, tumor agnostic we that the tumor approach, versus the that if variants any tumor And positioning genetic then about at I gives means a you information of idea in informed are of use of agnostic, you an where

generally, very every So, only when like mutation it and breast means reads XX.X% have from like a DNA and And say enormously only genome. variant in don't inefficient not one you long, let's across that plasma, of few the They the the XXX you have million any patch actually tumor, since might something sequence out a bases bases sequence don't a reads information. are cancer, so useful the something it's of the sequence sensitive. approach an

performance result, think the already is As the targeting we've has wholeheartedly we're been tumor the it's achieve our one customer to provided of We that on way adopt been the to only we've with, informed that fantastic. working a sensitivity seen that and the samples kind approach. approach

the So, have the down comes is think to But more informed I say performance. about as the hands don't tumor product that approach question out. that we'll any there's

Unidentified Analyst

That Got clinical Thank the about you. the market how it. are you color. down very thinking road. was helpful then And entering

John West

pharmaceutical companies probably We an issues reimbursement. often step customers, that, advanced for business and there's these in based and start doing anticipate here. So, to with no We've very Personalis. the few next this is building are important years been on our with next

strong financial that. achieve on been performance able we've relative based So, to

extrapolate information. where information, are cancer a if because existed eventually as by that data not weren't genetic not that -- And required kind the done. Going detect we being that time points, comes time. was but sufficiently see forward, back like not of of fingerprint, or sensitivity in those that we're was much, do to There's those a intervening tell sensitive And would then there by better today can points cancers since eventually are the year not at cancer diagnostics of in it the we products. that at tests fact before back will is the that is available much with look time what that is and detected. in that more can plasma. NeXT we tumor And genetic view a tests are sensitive test is can they same in the can see is cancer we've tumors, informative earlier sometimes richer And you go being our and currently be information can only that surgery, the the lot developing the detected the just patients means our have all enough. a the Personal a just that's But detected see the been to most at two able from that

advanced at cancer to thousand realized. variants generally thing you Obviously, be start the something or genetic that ability think more So, a end testing of high kind this be And transformative. will with centers. at be the will would medical be look we might that more

starting that us. be And so place a for would reasonable

FDA are important the approvals that been have diagnostic also We our working Platform. for think We approval on FDA market. for NeXT

about of as the we'll but we say opportunity make those progress to clinical market, are that towards steps is have more and it perhaps So a us. major the for some

Unidentified Analyst

you. Thank

Operator

the Your line next Schenkel question from of Cowen. Doug from comes

Your line is open.

Doug Schenkel

you taking questions. Hey. Good for thank my afternoon everybody and

what start just if line? NeXT there, for gates be wondering, commercial of and for product on milestones should terms I'm just could stage in guess share I R&D So, looking Personal, to you that upcoming or we

John West

where as testing at samples. I we're a to mentioned, point start so we're provided able customer now Yes,

seeing can we've customers because interested of very with performance of the see worked kind very, with over advanced NeXT is they differentiated. a topics, what we're of variety in have We them years number so of a Personal about talking on that the are some

in what think we'll a launch And would you'll of actually number NeXT have we'll and do be lot been we've done in that And a their prepared product, rather collaborators. so I potential interestingly, remarks that mentioned as we'll see, samples, said by NeXT XXXX. of that the resected. to patient we've expect that. the I liquid and We synergy formal and than both have surgically of that let's come you between a time because a has we'll from off the customers I biopsy, a is that -- do Personal running substantial tumor with imagine see

the treatment, more comprehensive can in view scale the that interim, of it as then back. So, fact we to it resected then certain can -- coming if can to tumor level, progresses may And or on scale and a it to be can comes use in it it's We time you a may liquid have a back, when the you mutations. between the much in anticipate it's the watch detect tumor test, on. with going escaping new it the lot what's and coming gets how up be be the at been drug time levels, And fact, use drug. if to surgically it our was and if NeXT variants. there where identify genetic it then that biopsy Once grows. exome can you'd we bring is may but Platform that Personal is This extremely exome tissue NeXT the see back, in have advancing of if able might low the be

have of be the at surgical variants. just time whole back were they've Biopsy exome tracking mutations looking so level, the mutations the by the missing exome gives able the that But wherever And of happened Liquid be NeXT to the in here, a happened that to tumor and lot in the you detect you'll of to see the in it ability those. resection with new

biopsy of liquid tissue, those working next its provide will a see view platform all NeXT comprehensive products, our over as our three from we tumor, patient's NeXT and evolving and time. the So together to Personal

Doug Schenkel

And Personal next the use think Or from And on that this first that order to nice early John. to are to well? ramp of look here? kind samples expect for helpful, Super in hear from segue it's retrospective is the -- likely be you initial samples? you customer you there's going using prospective there biopsy. that delivered to -- do What liquid use like do cases your liquid, as to then NeXT

John West

Yes.

beginning, work, is up the scale, nobody whole it's exome commercial said, So else new a a category, of from biopsy good we've really The kind question. point. a this to this liquid as has early had

so And that? what's we lot the forth? having of will for activity expected be in use and so to does So a figure pilots. it that are people best well work out, XXXX, How

of We kinds a orders. bunch have of those

from continuing we beginning are back first to Now we're at already, want it. the to samples to was this. from results do and people process I first wow, for their made more comment we look would of initial customers say who the got customer

times quickly. And decisions make people they're in where them, some of of situations fairly a to lot are trying

things these reasonably the So sometimes around turn we quickly that fact helpful. is can

it, could prospective. the expect that be patient. say, I'd how would prospective in might be expect a described as -- kind I the will samples the I'd going some be that and So I of forward, of this involved treatment it of

liquid collecting of in have an On our the of biopsy been pharma samples hand, for period extended lot time. a other customers

early that of much And have to and time our I pharmaceutical use. our retrospective so the space, that leads NeXT retrospective of the because banked, liquid amount oncology the business in we those so with in so a pharmaceutical business will have period be fair expect companies. biopsy would of And they

Doug Schenkel

specific there biopsy Okay. pan-cancer origin. backgrounds for Personalis from One shedding a patterns to genetic of for was HCR, In one. last poster ctDNA tissue with liquid NeXT and different and cancers

moving In digging what be on I'm about especially deeper a bit just little about I'm wondering forward. little talk data, terms in willing bit to heterogeneity. interested of expect you'd commentary we a more if that might

of that this whole anything secondly, predefined as exome. how versus are tumor in insights for by interested many In you being informed As you identifying seen And words, terms utility then other of missed appreciate sure have liquid implications I'm tumor you biopsies. are in panels? the actionable I'm agnostic

John West

diagnostic liquid it's -- too collaborators of The detail, the look limited more they if But And yet, genes. have we we describe with can center, medical escape, cancer are of genes. don't a of much caused we've times tumor significant other genes in the conventional can't one so out, tend lot that progression we that of people genetic small are were on tumors. able cancer. the what was high-end sets of therapy released they doing therefore the the that in variants aren't biopsy all an aren't be of aren't their genes across were they obviously, to But in work in it particularly just really panels, to design turns first NeXT that in variants have these panels. these in And conventional tumor be you and data a these exome, the they're categories, using place. that And appear to show those they they those just but absolutely. worked capture tests, genes the a in haven't necessarily by that kind panels, the fairly may involved terms happen it escape from much the and the to Yes, include designed in, certain having in identified

that the look this having helpful you all. at think we're why not So look genes proofing is just that which example. to happens should them presupposing, we future all at This change I it's when is an of by sort is

Doug Schenkel

Thanks John. a lot,

John West

Good.

Okay. Thank you.

Operator

comes line. Citi. from next Your from question Donnelly Patrick the

open. is line Your

Unidentified Analyst

taking trials on what Apologies in and geographies. if question. is the been you for can I just have just This other Thanks in you your But Patrick. China you mentioned I you've missed this. And for just Thanks. your Jesse timing the [ph] clinical in of new if customers some for that for you working factored the lab us XXXX? in with guidance any with revenues Great. then remind of conversations existing the

base? sense the you market your existing proportion just customer what So open have lab curious, up if around will this a within of new

John West

been involved Yes. operation. off in and our let Hey, that start I’ll China very Aaron he's

Aaron Tachibana

build lab, is standpoint, begin ready of it, test go in or of out this almost development in so year where have it of out. We've to don't expect to year terms equipment then into China we few able develop Unfortunately, be year. and facilities process XXXX we the basis. pilot revenue Yes, to terms months. China. our to right pandemic back it the is from be next really built going We've forth from the a of the samples completed. now up employees. a we And going to couple travel guidance the to got and able go this much build We're on testing. been be the the both showing training then This year hired But revenue to first the haven't sides. to due going you And lab over on restrictions to we're

beyond. really So in and the revenue is opportunity XXXX

actually percentage to an up In not market, lot We're it's China, as of access extremely who even of thrilled. to outside global our a of China clinical to opens of run pharmaceutical we're samples want only to capability, have China going this outside terms of in in of the have that global large partners up because and going trials. up, more we this they are setting China, market open but

Unidentified Analyst

Yes.

John West

I'd And that. support I guess

be It's you we're get regulatory supporting regulatory that with be test run and a for pharmaceutical things really we the I to will large us if saying, we're position to order where China. where authorities China. ours, category. those think dollar But close multi-million get going a because formats and we've we'll in working just cases the been can inside them single of building the to lab, have And great, samples helped permission was Chinese already one company. they're orders -- the like on do we the up in around

trial, are running that are international world trials For large pharmaceutical of companies outside simultaneously. the the around many China, countries portion the many is which of clinical recruiting patients many, in

non-China samples our the lab process from And can in that. of out Shanghai countries China we from ones all so then for and have lab, California we once our in the patients permission process the

to revenue from what part the that are of I reported China see is, other of more boost in being eventually samples were clinical we'll there'll from be trials all we revenue that portions non-China revenue think will that's the as sequenced much expect the run of a be only gets of the have that actually, -- that significant be So we countries. the where in those actually was sort being coming revenue the China. But all

to this So those and access gives to a parts as having well. non-China as lab effort, truly trials we see do us international the and the China

Unidentified Analyst

And an Great. MVP? POPSEQ then start provide new really of helpful. just the you on expect outside the having I Okay. you update to That's VA mentioned think in pipeline relationships XXXX. can you

the curious when bidding timeline just we some when about decisions? on and those you'll So like what for award be hear could looks actual Thanks.

Aaron Tachibana

Yes.

it's these mix. groups to well. to countries, the is, done this been lot really year, projects this others countries component a bring prior to what is engage and academic something September big not sequencing but where leveraging we’ve world. it And -- sequencing to there, set So to a work the all have we him a the used in up groups. the on interest say, to his seen development there, lead inside population Personalis highly a a scale and knowledgeable of of contacts been do Medicine been and population remarkable projects then we last with I'd about has times over actually sequencing side hampered with clinical We've pharma of board And of Genomics individual business at they're these into want lot as the has And of for experienced by brought activity. our in Ireland production

sequenced So benefit from from the data genomes. being their people and own who the are

a as bringing well. that And so we're that's component to this

government I we are think fair on this. you now there's So of amount interest large a These do see programs.

fairly So we that in with be can revenue also expect I to XXXX orders the that process lengthy, said see decision XXXX. we would on first the think in additional but first

getting to hard on and exactly still I week. a about some things those timing, think interesting. but always boiling that's review countries of track. to are It's it's still pretty this these like multiple of I pots yet, where beginning, we say things be the looks wouldn't simmering know there are but that's the And it's earlier had definitely

to to definitely we're a contract I patient have think where but point announced, So here. I think there's get we just a to a be little a track good we on

Unidentified Analyst

Thank great. That's you. Okay.

Operator

BTIG. line the Your of next from from Massaro question Mark comes

Your line is open.

Vidyun Bais

Mark. for Hey, Vidyun is guys. This

John West

Oh, Good. hi.

Vidyun Bais

All right.

milestones just So mix, And is partnership kind just of for a the becoming looking an if update revenue provide there? a could you've past, you what be add larger talked could entire portion we follow-up. if the progressing, on should In of about how forward. I biopharma looking

to held just in that of check see wanted So true? kind still and if

John West

Great. Yes.

happy to is those. answer this I'd John, So be

relationship great. to been this. on has forward the have with really been So They Natera trying move

implications disclose. have -- the that of think anything to I in that they something would think I need terms which their revenue is

with won't do their to we things So revenue. disclosing be

course. is test a see a I also anticipate companies, those very so they've early pharmaceutical think it's both And of positions market of this and is from support the from in different work we we diagnostic those. entry both Personalis, clinical next it they what There a that two with will being doing. benefit is quite program. product And very I hand, active they they think a where and and the able kind other with good of a both Personalis the to can our is lab a a disclosed, address On and early they And we're really program. And other different clinical side. market but with significant developed -- component

And effort excited point. pretty -- going him. of pretty at on about that area this I'd say we're lot a we're So in

and to past, think I we purposes, of are our we financial lines parts viewed And there'll the quite these on of two and I created sequencing reporting likely the they've business, would the the the see over different oncology in population been they've as will different more converge, be between -- being they've up as both side, side these more out. have say, side. ended the and time them. blurring biopharma being that broken

interested As of quite the been number pharma are talking who efforts talking in population I we're population in pharma. in involvement bringing a that actually now, involved pretty that market. companies mentioned, to they're sequencing some being interested groups of the these sequencing We've to with of we're

as blood. past So But cancers, really this of genome people's mostly of obviously a was there's of going germline these. component example become Population the in genomes to about sequencing something from clearly be oriented, these where clinically an whole there's is overlap. major more sequencing

whole also having we commercially that And is well. experience anyone probably advantage largest or Personalis so there processed, in sequencing, the human XXX,XXX, having clinical the more huge samples cancer world, and potential of of the genomes, brings have the but as then numbers

helping to of the finance that in engage these put the sort country a both with but pharmaceutical efforts. all for some can interested So and we be that together companies also fact data, may of

that overlapping are these and are, these the businesses see two think more we I where things more.

oncology I'd side the been both business time. I as we we recently, of kind So, of sequencing population to has sides think more to had we've at growth over going that growing than -- the of side, say, our you point, see think are rapidly going business the this the grow are

oncology and But and said, think likely businesses I more that and and increasingly are being out the the oncology will taken have population likely years XX be look almost of elements is meanwhile, business of on more opposed businesses. big you two is separate probably more sequencing, as so to elements competing to which diagnostic more overlap kind If the to larger, business.

Vidyun Bais

Thanks awesome. Okay, much. so

John West

Thank you.

Vidyun Bais

just And that? on Are factors VA order? visibility estimate of on, task likelihood the an you can unrelated follow-up. in able for renewing the like provide a if some touch So contracts that you go of the into to getting competitive an

John West

Yes. Sure.

expect VA now indication going which scores, likely issue order, contract additional take the been We've times the they've John. and The multiple about step the And been for expect an I Actually, we say, of years. has we they're August that this. talking what interesting between of at VA would been the multiple to an into having able of VA that contain. it's that more happen done existing is with to task on So kind have task exactly money number that's would some some sequencing years. discussions on million to with competitive our is current aspect the largely to provider the existing been new areas. to whole an being have, been and it, we and doing project. be about there of could continuation expanding this as we're is the work Because genome contract in is over we But towards just it the a that We've point. that end additional perhaps probably an a already veterans program expansion no put We've since only the extension XXXX.

possible we've best able of partner out. skills a the there. help to done admire lot bring try it's And what VA. great things be And And relationship We really we've just for they're to some been doing. the of think to it's been long-term our relationship. So a to I a

Vidyun Bais

Thanks for That's the Great. taking question.

John West

Okay. Thank you.

Operator

Your Mike line from Needham next Matson from comes question & Company. the

open. is line Your

Mike Matson

my questions. margin. for Thanks Guess I wanted afternoon. with start taking to Hi, good gross

volumes But just should on, wanted doing obviously I grow seeing to you're on margins? what the update there. So, to aside improve help volume just from get an your gross

Aaron Tachibana

that, take John. I'll Sure,

of gross In terms margins.

margins are in here volume QX, quarter highly is So right dependent we important. a upon volume, great had the gross

VA the can be did path you doing $X.X testing forward, margins VA than we automated more we scale more process, of we've Today, biopharma it's the require labor terms than biopharma. with per do our we're revenue same MVP MVP do on manual see little and with to And And accordingly. million so of highly thing sample so the a side. process going in more the

standpoint. from point to another play get margins. that's our in level able this you peers forward scale at so line And when to that be objectives time, industry. personalities see, improve equivalent going the to other at And to of look you're to in top to are And scale, we with going as the go we're with margins

Mike Matson

wanted go to just partnership. then, thanks. Okay, Natera the And to I back

like biopsies, continue you're to after I to your offer So -- samples sounds their are even companies sequence tissue it your support to own? to other mean… liquid planning launch you services you

John West

Sure.

Mike Matson

what point? Or large, with it's own competing at the cannibalized that on not I kind just is own your tests? own -- thoughts are product, of not market test just mean, your your it just as is so viewed it's that just this really

John West

as that a see don't problem. I

market. of think versus ours. like companies are be call very from I agnostic have talks tend variety strategies, this products different tumor the a to people a companies There tumor different taking on And it's other and quite that. of informed about, things large

think on companies for and that that. sides whole in with there's this money work supporting revenue of of interested driver the off to we be the of In main growth area, I we're we divide, made of think long-term, Personalis really that So, and be both growth will any the doesn't other of in we're duplicate be company, doing what think companies that kinds doing. would true good our own products, a I of there's market that are work, that actually, lot other

mix. a supporting with kind them. mistake, the actor work not part to our happy make here. of no we're to role to be of so, But, a can overall is be And just And it

happen. we technology to We the that we one to IP expect and Personalis in time. think the over largest be companies And space of have this make

it's for to all relationships Personalis going along almost be where these you helpful the So to has. based to I years XX But the if us model think it'll we definitely be products the way. on are get -- five out,

Mike Matson

things I work or like governments to is sequencing you you or about groups. as at are the limited really other was industry in would mostly this? doing thing in other the that? -- that mostly population it's then other maybe be population global Thanks. mean, some just could organizations anything seems governmental talk could the discussions private, with maybe groups like that of sounds it it it there or wondering, sequencing? customers is But it Or potential mean, And looking types I I a for, do as you are could it Okay. then, goes, groups you're far But, And interested just like where are there. if US?

John West

the Well, yes, majority outside I'd say the are States. the United talking, other whether of programs we're

talking quite those there initiatives, folks. countries and So been few And, in the populations, sequencing XX we've probably or a with are of XX world.

the could samples get to So of sending quickly we're do and talking by scale that where at because it cases, And over today this started could economic up, were of world know to include and build California, these out efficiently we that people way. certainly ones on want set locally. lot all But of that want to we they sending the that. some groups to advantage have, a

in many And up lab labs certainly Shanghai, so been that. opens getting countries needed we've in If ideas the between and and at own US experience up we and that the distance U.S. between setting like there you've that, We China, the could differences have by and do to taken countries. that our once well, the one done certainly all a we've other are with other barriers as that China.

your talked terms -- you In types. about institution of

groups, some say initiatives first was I'd certainly one this are So just initiated of was, as England the which Genome governmental project maybe of were that initiative, in by they these these category. of are many the

based interest again, Now, in are countries, of the clinical of good -- the synergistic, ending these people pharmaceutical genetics developments well. people potentially, pretty sooner a to lifesaving would trial Europe. is, they as clinical people genetics. not, than see about to the market be well. talked like real other have European their some state-of-the-art to of drug of opportunities But over outside run of cancer if that have well. not as from occasion from attuned in who wants patients, certainly, because them, access, the trials kind genetics. rather approved pharma descent. the as on And lot being be this also it's countries, And from you with you'd There's It's pharmaceutical that those genetics that's And they know, patients as And and -- that it their do because, to country of the potentially from lot later, drugs all can up data serious for for the economically. we've of development and have US this, a a companies have of hand, like huge they’re really only They're world, with part really a a standpoint drugs. they the diverse have we

They institutions governmental know, a I in looking countries mix a the these it's and past But involving was research. doesn't different just real I pharma pharma. you include forward I other a the hard that start to component. institutional can And of think, involving to So, that think significant win-win. imagine imagine really mix this be think

Mike Matson

Okay. Great. Thank you.

John West

the have about way gross I had earlier more margins. one an by comment you question

could these true. happening actually Aaron that diagnostics, one here well, quite principle, not other to larger, really Personalis that who's amounts making you think continues And much more much use developed improve. of But it's I has that sequencing benefit although, that everybody the that's of technology is covered advanced enormous in say, sequencing. anyway. we diagnostic testing but elements could

running billion are FDA mainstream of the read that on see today, that their a look you If panels at market, we cancer maybe per basis use they the time a some at you'll filings sequencing we've patient. where these per lot, days, a small actually, sounds bases a a trillion number. it's And been We're a pretty like tests but to up know, sample. you billion

more. so you know, hugely And

sequencing just is hard to you of bases so you time. one to samples involve every has Illumina a run sequencers of more somebody's in looking them. already many can our many because more, at sequencing. that much bases state-of-the-art And terms at, bases handle It's expansive have don't billions Personalis billion of a hundreds X we've time and advanced the of if at been time Whereas, enter because only tests leverage biology trillion of been today,

us is activities, talked will like one will by with help other likely in And of we of using associated that. example, guaranteeing $XXX much most disproportionately, the year benefit comes these sequencing, has companies world XXXX the talked see, prices, we X% we're down, so was their for some Because from sequencing of by the about sequences disproportionately in help DNA of the all the or when in reduction the as so estimate they've last so the cost us that year, Personalis. sequenced of about sequencing platforms things and Personalis reduction that. Illumina, new genome and XX% about that cost to

laboratories them really we $XXX the to technologies, soon getting for on to larger for thorough we're the available. So forward sign-up in the answer Thanks the the - they're one absolutely and world. Okay. we'll as be as And look of first genome Q that. Great. to be

Operator

question of next line from Your Wainwright. Instructions] Swayampakula comes [Operator from the H.C.

line open. Your is

Swayampakula Ramakanth

H.C. Thank afternoon, and John Aaron. Wainwright. Good from This you. RK is

John West

you, are RK? How

Swayampakula Ramakanth

understand mean, clinical diagnostic the diagnostic to you Doing my have in the trying only trying MapKure I questions bit develop. trials little of have, where but help been they're for clinical that also asked. good. not a about Most relationship -- I to companion But just you're want the -- that their in out the to

is one helpful, So, do as with diagnostic thinks how suppose companion do for this would having you? long -- this that at market? an the the companion players similar sense if to sustenance you -- drug can having as many that as looking invite revenue to be their So additional how is the in this work life you really collaboration about example, in of with is -- a of relationship do to -- one you're first act

John West

great question. Yes. That's a

very biomarker of companion time PCR simple. that part doing. been been what the have see as single of So we're of an tests. very, we have for point do diagnostics see this up real development used kinds that lot and to kinds technologies companion of a We think like We diagnostic important

move so sophisticated that next ability more at. been to our what And the to aimed is beyond of a platform has really biomarkers lot

X that's so MapKure and successful, successful Phase we And effort forth. the the drug then X. to new go And trial, a through is if and typically Phase so Phase that of in X, if a clinical one have

with can them can about be yes, another. of of they gated scale where this obviously, through But time. pharmaceutical the that trials. effort period them it that we companion our of absolutely FDA would And it's And help taking not. the they phase us can an expect through would platform drug one using diagnostic the increase, on work then -- it are certainly that, with have this there by whether make after companies talking successful, be to on something we the financially. And extended kind to platform and that they that assuming now. So successful to they also begin the be need effort go be can as or trials anyways, would we're But with continues parallel that and to progress be a were as we Then development. other

But know, understand I team, think something interested I why a actually, with our people And with, think Pharma. spoke FDA very know diagnostic you used we have upbeat it say, homework people to I'd that's exome people involved obviously, But scale have considered and talk optimistic to we completely at do when make approval. that happen. the let's go a FDA, being by companion and -- they scientifically, see transcriptome the to whole and, been it's at same, quite sense. the makes an sophisticated get advanced to that you they're we

the PMA working that single-site So team, business. for. filing towards large have increasingly we're an of going think we're we I to important for our And the it's driver future FDA an be

Swayampakula Ramakanth

John. talk soon. any But I don't questions at additional I'll you, point. you this Thank have to

John West

Okay. good hear you, RK. Great from -- to

Operator

today's over the participating. there you at line concludes conference phone time. are call. further This And this no for Thank questions

you, all. Thank You may now disconnect.

John West

Thanks. bye. Bye,

Personalis (PSNL) 6 May 212021 Q1 Earnings call transcript